Downing Street stalls on political donations cap despite pressure to curb Farage's funders

Britain's elections bill, returning to parliament on Sept. 2, will not contain a universal cap on domestic political donations, according to two officials briefed on government thinking. Instead, the legislation will focus on existing measures targeting foreign donors and banning cryptocurrency contributions.

The decision disappoints a group of Labour MPs who had hoped to curb the flow of money to Nigel Farage's Reform UK, which has benefited from a wave of large individual donations. Currently, there is no cap on how much UK-based donors can give to political parties, though donations above £11,180 must be reported to the Electoral Commission.

Before taking office, Prime Minister Andy Burnham told transparency campaigners he backed a cap of roughly £500,000, aimed at preventing the perception that any party is unduly influenced by a single donor. However, officials say including a cap in this bill risks delaying another provision — extending voting rights to 16-year-olds ahead of the next general election.

Impact across parties

A POLITICO analysis found that a £500,000 cap applied over the past three years would have hit Reform UK hardest in proportional terms, blocking about 55 percent — roughly £12 million — of its private donations. Labour would face even steeper losses if trade union donations were included, losing up to £34 million, or 47.4 percent of its private donations. The GMB union has already urged Labour MPs to reject a cap, citing concerns over damage to its historic relationship with the party.

Labour MP Stella Creasy has proposed an alternative: a £100,000 cap mirroring the limit on overseas donors, with union affiliation fees exempted. Public support for stricter limits appears to be growing — a January YouGov poll found 67 percent of Britons backed a cap of £50,000 or less, while support for the current unlimited system has fallen sharply since 2020.